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Halvening and short term price -

Supposedly the effect is a reduction of supply, and the subsequent increase of price. The sellers are the miners, but who are the buyers?

So, first condition: demand is what drives price increase, not offer. Is it there?

Enter ETFs, Ordinals and Runes and associated VC scammers and "Bitcoin OG" grifters, retail (completely absent this cycle so far...)

I'm not saying there is or isn't demand. Just putting it out there.

Then, assuming demand is there, price doesn't automatically double to catch up. So, the amount of BTC miners have to sell to cover operation costs and satisfy shareholder profits actually increases. Which is detrimental to price increases. Which means that an even larger demand is required to move the price up.

Is my logic wrong? Again, rather than asserting anything, I'm just putting this out there, see if anybody has arguments that contradict my reasoning.

With the Fed insisting inflation is not under control and large asset managers pivoting even more to bonds, and the summer right here, I think it doesn't bode well for risk-on assets, let alone Bitcoin in terms of demand. Not in the short term.

Which I as said yesterday, I very much welcome because I have unshakable long term conviction and a cooldown of BTC's price right now would allow

me to keep buying and stacking like the psycho I am.

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Discussion

Azz 1y ago

The runes are giving the miners 6 times more Bitcoin to dump at the moment. The price probably factored in a decrease in miner supply. I can see a short term dump.

Gowingnut 1y ago

What you say here is true, but for 1 thing:

"So, the amount of BTC miners have to sell to cover operation costs and satisfy shareholder profits actually increases."

With halving, miners' operational costs have not increased, there's no need to to sell more BTC.

You could mean that they will have to sell a bigger share of mined BTC, but the amount stays the same all else being equal. I don't see how this alone can have a detrimental effect on the price.

All the rest is cool, but you leave out

ETF buyers which take some warmup time to study, consider ther competition, etc , so I don't think it's there yet.

My guess is we'll see real institutional demend in a year or two.

But this thing is hard to overestimate.

hh 1y ago

Well yes, you are right to introduce that nuance about the miners. I was assuming they pretty much convert all BTC they mine to fiat. Are they actually keeping BTC in their treasury/reserves?

I also agree about demand in the mid term, and even more about the long term. That's why my comment was about the short term.

Talking about one to two years - we still have the Jan 1, 2025 date to mark on our calendars. That's when based on the new rules from the Bank for International Settlements central banks will be legally allowed to stack BTC (and likely ETH) up to a 2% of their reserves. We all know some states have already started to stack on the low, but when the central banks can do it in the open, now THAT will be wild.

Jeff 1y ago

My take is that the weaker miners who need to sell all their btc to keep afloat will go to the wall. The stronger ones will remain and can hold onto theirs - removing this supply until the prices rise to a point in which they’ll sell.

Regarding interest rates, we’ve already seen a bitcoin ATH in this higher rates environment and while the rate cuts aren’t coming as soon as expected - they’re coming at some point. This should move the price.